Welcome to the AmpleSense DAO Community Hub Forums General Conversation Do the users really understand AMPL, and what can be done about it?

  • Do the users really understand AMPL, and what can be done about it?

     Jm3 updated 10 months ago 3Members · 9 Posts
  • Jm3

    Member
    September 29, 2020 at 15:00

    I stand to be corrected, but my understanding of AMPL is that it is composed by two sides: one is the protocol’s positive and negative rebases; and other is the human action in buying and selling, ideally in an effort to keep the price stable at or near to the positive rebase threshold. But the users in general possibly do not understand it and do not act accordingly. Instead of buying when it is cheap (about < 0.9) and selling when it is expensive (about > 1.1), the users FUD when it is cheap and sell, and this is exacerbated when they see their number of tokens reducing, a fact that should prompt a buying behavior. They act as if AMPL is a regular token: they buy and expect it to “moon”. Some realize that participating on the Gysers may offset the negative rebases, but Apps like Zapper allows the use of AMPL alone to get the UNI-V2 necessary, and by doing that, Zapper sells some AMPL to ETH, which again creates more selling power, driving the price down. I see on social media a lot of advises like “Please read the white paper”. Well, most don’t. And many that do, do not really get the meaning. It is very different. I accept I may be included here.

    So my point is that most of what happens to AMPL comes from the fact that users do not understand what to do with it. But their human action in aggregate is mostly needed because it is one vital side of the protocol, as exposed above.

    I would suggest a quick practical guide to AMPL investors. Again, I stand to be corrected, and that’s why I am posting it here first, to be fully criticised:

    1 – Buy AMPL when it is below the negative rebase threshold. If you have the means, DCA in to generate several purchases and press the price upwards.

    2 – When the price is above the positive rebase threshold, enjoy your AMPL quantity increase, sell it and get your profit, but do not go away. You can repeat the process and profit again. Ideally we should try to keep the price within the positive rebase threshold to increase the market cap.

    3 – If or when the price comes down into the negative rebase area, buy again, as per step one above. And when the price is above the positive rebase, sell again, as step 2. Keep doing it, let’s all keep the price stable at the positive rebase range. Spread this mindset on the social medias to generate a kind of coordinated action among the users: just buy below the negative rebase threshold (buy when it is cheap!), sell above the positive rebase threshold (sell when it is expensive!), and keep doing it.

    4 – It is imperative that everybody keeps buying when it is cheap and keeps selling when it is expensive (a good practice in any investment) so in the aggregate the correct pricing power is generated towards the equilibrium in the intended level.

    5 – AMPL is not supposed to moon. That’s not how you get your rewards. You get your rewards by keeping it at the intended price level, at the positive rebase range, so the market cap moons, and everybody wins twice: by profiting with AMPL and, more importantly, by making it stable and uncorrelated to anything else. That way, AMPL will become the token where we hold our wealth and keep its purchasing power.

    • This discussion was modified 10 months ago by  Jm3.
    • This discussion was modified 10 months ago by  Jm3.
  • FudBuster

    Member
    September 29, 2020 at 15:19

    I think your understanding is fairly accurate, and you are making some great points in this post.

    The problem seems to be lack of understanding indeed. July sudden growth brought in many new users that quickly developed “rebase addiction” without really understanding that sustainable growth requires adoption, utility and users.

    I believe that given enough time the protocol will achieve equilibrium all on it’s own, but in order to accelerate this evolution, active participation from the community in educating and guiding new users is vital.

    Utility is also an important factor when it comes to increasing adoption. If we educate users and encourage innovation, we can together build these utilities further increasing adoption.

  • davoice321

    Administrator
    September 29, 2020 at 15:29

    I also think investor / user education about these elastic finance protocols is really vital. I personally have some ideas to help with this that I can’t wait to propose once the DAO gets up and running more fully.

  • Jm3

    Member
    September 29, 2020 at 15:53

    Hi, FudBuster.

    I agree that with time the protocol may achieve equilibrium, but am sometimes afraid that with this wave of protocol clones the main idea of AMPL, which is to be a stable uncorrelated unit of value, gets lost and forgotten.

    I realize that most users are not interested in engaging in any community, DAOs, or governance. They want to buy and profit, the quicker the best. That does not help. But they are vitally needed for AMPL mechanics.

    That’s why I came up with this idea to guide them, kind of indicating that AMPL is different, and what to do, how to do, before understanding. The understanding at this stage is probably too conceptual to be grasped. When the protocol really starts to work, the utility will become more evident, and hopefully a better understanding will emerge. When many see that profiting in the crypto space or wherever else and then holding this wealth in fiat is unadvisable, and the possible answer for that is AMPL, I expect that the full potential will be unleashed.

    The ideas being discussed here are generally great, but they all require a functional AMPL as basically designed. And it will not be fully functional if human action is not happening accordingly. So, adding extra utilities may add complexity to an already very unusual protocol, and I don’t know if that should be the focus now.

    I am not tech savvy and don’t know if what I am about to say is feasible or not. But today another idea crossed my mind. What if another pool of tokens could be created to coordinate the pricing forces, in order to keep the price in the intended range? Everybody that has AMPL deposit them in this pool (I would suggest to name it Magma Chamber, to be sort of aligned with the geyser geological idea), and periodically (daily?) this pool – a smart contract – checks the current market price and buys or sells in an effort to keep the correct price range. So, people deposit their AMPL, gets back mAMPL (magmaAMPL, or more in the sense of managedAMPL), and this smart contract does all the price action on the people’s behalf, with all that volume at once, in one transaction to keep fees as low as possible. That would insert the human action back inside the protocol’s algorithm. One could redeem then from the magma anytime, but the work could have been done. Just food for thought…

    • This reply was modified 10 months ago by  Jm3.
    • This reply was modified 10 months ago by  Jm3.
    • This reply was modified 10 months ago by  Jm3.
  • davoice321

    Administrator
    September 29, 2020 at 16:07

    Some of the ideas in the Idea Incubator actually are aligned with your thinking. The Negative Rebase Insurance fund actually focuses on this idea of providing some downside protection.

    The wAMPL idea also provides some downside protection and additional buying pressure during negative rebase events.

    None of these ideas require Ample to do anything other than it is already doing: operating as intended from a negative and positive rebase perspective.

    The issue of investor education is another one. If you look at what’s happening with other elastic finance projects very few are doing very well because of the same issue: how people react to the price of these assets and how they behave during positive and negative rebase periods.

    Overall, I believe there has to be some additional demand drivers that are more organic or as a side benefit of what people are doing in other contexts — beyond liquidity mining, such as borrowing, lending, derivatives, etc.

    That’s what we’re focused on doing in the DAO. Creating those organic demand drivers for Ample that are less dependent on speculators who are by their very nature, fickle and seeking to maximize profits at any cost.

    • Jm3

      Member
      September 30, 2020 at 20:05

      Thanks for indicating the idea incubator, I will have a look. I haven’t explored yet all the ideas and the other posts here, but will do my best to cover as much as possible.

      I agree that Ample protocol does not need any modifications. I also fully support additional uses that may be created. They will indeed enrich the whole ecosystem.

      It only seems to me that Ample needs a big adoption to deliver its functionality. And if by one side users education will help that adoption, my perception is that a big number of the users available in the ecosystem are not necessarily interested in learning and understanding, but they are the investors available.

      Fortunately, as FudBuster said on his reply, it is possible to be focused in more than one thing at the same time on this attempt to develop Ample.

      The Rebase insurance fund is a good idea. Borrowing, lending, derivatives platforms are all also valid ones.

      But they all may require even more explanations and education to generate the necessary adoption.

      I suppose most have access to the Ample official Telegram account. I see there a lot of “when moon?”, “Pump, pump!”, “When lambo?”, “Just hodl”, “The whales are dumping”. A good part of the cryptocurrencies users are primarily, probably only, interested in profiting. That is their language, that is their mindset. It is a big challenge, as you said, to educate them on how to use and invest in Ample, even more if there are relatively long periods of negative rebase. Thence the suggestion to meanwhile also create a practical guide, in a very utilitarian approach, with easy steps on how to earn (which is attractive and very possible), that are at the same time steps on how to help Ample deliver its full potential, without necessarily being educating on why and how it works under the hood. Elastic supply is not common sense. The explanation of what it is and how it works is available, but I suspect Ample and all the other elastic supply protocols should not be so dependent on the investors a priori understanding in order to perform. Despite this, proper investors actions are vitally needed.

      Maybe Ample has to first fully work as designed, and only then the mass understanding will emerge, from the experience.

      I would like to raise the awareness that, if it is correct that a good number of investors do not understand Ample, and therefore do not “invest right” just with the token, there may be a considerable risk that creating other use cases for the protocol, instead of promoting it, will backfire and become new points of misunderstandings and losses.

      • davoice321

        Administrator
        September 30, 2020 at 20:57

        Maybe Ample has to first fully work as designed, and only then the mass understanding will emerge, from the experience.

        I would like to raise the awareness that, if it is correct that a good number of investors do not understand Ample, and therefore do not “invest right” just with the token, there may be a considerable risk that creating other use cases for the protocol, instead of promoting it, will backfire and become new points of misunderstandings and losses.

        In my conversations with people, I’ve seen a number raise this point that: “Ampl must work fully as designed” before we begin creating use cases for the platform beyond holding “naked” Ample.

        My personal belief is that Ample isn’t working “as designed” because there aren’t enough demand drivers beyond speculation to encourage utilization of the asset.

        I also think that there’s benefit in having derivatives of Ample or other elastic finance assets that allow people to benefit from Ample’s effects, but with less downside and risk.

        So, Ample will only perform as designed when there’s enough demand, and there isn’t enough demand for it to perform as designed. A classic chicken and egg problem.

        From an investor education perspective, yes, we can certainly teach people about the benefits of elastic finance, but the vast majority aren’t going to look that deeply. So why not do things to both educate and help unsavvy investors reduce their risk and benefit from the asset in different ways?

        At the DAO we’re focused on both educating the masses about elastic assets and helping to drive adoption and demand by acknowledging and catering to the different personas that will be interested in utilizing or benefiting from an asset like Ample, without treating all individuals the same, or expecting all of them to have the same risk appetite.

  • FudBuster

    Member
    September 29, 2020 at 17:22

    You said, “So, adding extra utilities may add complexity to an already very unusual protocol, and I don’t know if that should be the focus now.” In response to this I would like to clarify that adding utilities does not add complexity to the protocol itself. It adds complexity to the ecosystem, forming more connections expanding the network. This I imagine would have a inertial stabilizing effect, since supply changes trigger automation to respond by moving tokens through the network to balance it out.

    And since the core developer team seems to proceed at a very slow pace, I believe community can band together to make these vital applications a reality sooner rather than later. I believe we can have more then one focus and work in a holistic manner to strengthen the Elastic Finance space. Also utility produces much needed funding for education that in turn breeds innovation and utility. So it’s a chicken vs. egg situation.

  • Jm3

    Member
    October 1, 2020 at 05:47

    My personal belief is that Ample isn’t working “as designed” because there aren’t enough demand drivers beyond speculation to encourage utilization of the asset.

    I also think that there’s benefit in having derivatives of Ample or other elastic finance assets that allow people to benefit from Ample’s effects, but with less downside and risk.

    So, Ample will only perform as designed when there’s enough demand, and there isn’t enough demand for it to perform as designed. A classic chicken and egg problem.

    Yes, I couldn’t have said it better. I believe we are on the same page. A chicken and egg problem.

    Both creating new derivative uses and educating and coaching seems to be the way to go.

    I had seen at first the education and coaching side of the problem. Now I see your point in also generating demand in derivative ways.

    Speculators are market makers if they can act properly. Demand drivers are also market makers that can be automated to optimum efficiency. The idea of the DaO is great, to cover both sides. Thanks for your patience in making it clear.

    If I can be of any help, I would like to contribute!

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